Recycling Economics: A Cost-Benefit Analysis

Since I started at Recology a few years ago, one of the most common questions I receive surrounds both the environmental and economic impact of recycling. It’s usually in some form of: “How could the environmental and financial costs of sorting, shipping and processing of recyclables be favorable to simply sending the material to the landfill?”

The answer to this question is based on the cost and environmental impact of recycling facility operations – sorting recyclables and shipping the material for processing so they can be reintroduced to the market. From a cost perspective, can these efforts and the resources used be advantageous to sending the material to the landfill? Yes, both financially and environmentally.

That said there are two important considerations that must be included in the discussion:

The first is evaluating the difference between producing new products from recycled versus virgin material. Recycling aluminum, for example, can reduce energy consumption by as much as 95%. Savings for other materials are lower, but still substantial: about 70% for plastics, 60% for steel, 40% for paper, and 30% for glass. (1) In all cases, the energy savings are significant and well worth the effort to recover them.

The second are externalities, which are the un-priced, outside benefits that recycling produces. These include decreased air pollution from mills and factories, less water contamination from landfills, and reduced resource consumption. All of which have a financial and environmental cost. The process for obtaining and processing virgin materials is not often associated with recycling. We all know that mining, drilling and logging are activities that are detrimental to the environment, but since we aren’t paying for them on our monthly garbage bill, these factors are oftentimes overlooked.

When we really delve into the economics of recycling, it’s easier to understand if we look at the big picture. The energy used to separate and process our recyclable material is offset by the amount of energy it would take to extract virgin materials and create new products. So, there is much more to consider than the cost we see on our garbage bills, and it also makes a lot of sense to think about our garbage as materials or commodities to be re-used in the future.

Thanks for your well researched article, Erin. I’ve always been an environmentalist, and when my employer informed me that he was getting a commercial recycle dumpster, I was thrilled! I wish more people would start recycling, but we’re making excellent starting progress!

I like that you included environmental benefits of recycling. In the past, I have only recycled cans because I got paid for it. Now that I know the impact recycling has on the environment, I will try to recycle different materials as well.